HAC News

HAC News: February 4, 2015

HAC News Formats. pdf

February 4, 2015
Vol. 44, No. 3

• FY16 funding process begins • Rural housing budget requests more rental funding, less for self-help, and minimum rent for tenants • HUD proposed budget for 2016 boosts funding • HUD issues Housing Trust Fund interim rule • Property owners must notify tenants before final payment on Section 515 or 514 loans • Guidance issued to help RD staff set voucher amounts • RD announces FY15 funding policy for Sec. 523 self-help grants • CFPB hopes to facilitate small creditor and rural lending • Supportive Services for Veteran Families grantees can apply for renewals • FHFA proposes minimum financial thresholds for non-banks

[tdborder][/tdborder]HAC News Formats. pdf

February 4, 2015
Vol. 44, No. 3

FY16 FUNDING PROCESS BEGINS. On February 2 the Obama Administration released its budget request for FY16, which begins October 1, 2015. The total for discretionary programs exceeds the Budget Control Act’s caps. The next step will be congressional hearings. More details about the budget’s housing portions are on HAC’s website. HAC will present a rural housing budget webinar on February 6, which will be archived online for later listening.

RURAL HOUSING BUDGET REQUESTS MORE RENTAL FUNDING, LESS FOR SELF-HELP, AND MINIMUM RENT FOR TENANTS. The budget would keep many of USDA’s rural housing programs at or near their FY15 levels, and would increase funds for some. Only $10 million is requested for Section 523 self-help; RD officials told HAC they expect to have enough carryover funds available to renew expiring contracts. Like last year’s budget, this one proposes some changes in the Rental Assistance program, including a $50 minimum rent. Some Section 515 funds would be available for new construction. Section 542 voucher funding would be more than doubled, and vouchers would be available for tenants of Section 515 properties leaving the program for any reason, not just foreclosure.

USDA Rural Dev. Prog.
(dollars in millions)

FY13
Approp.a

FY14
Approp.

FY15 Admin. Bdgt.

FY15
Approp.

FY16 Admin. Bdgt.

502 Single Fam. Direct
Self-Help setaside

$900
5

$900
5

$360
0

$900
5

$900
0

502 Single Family Guar.

24,000

24,000

24,000

24,000

24,000

504 VLI Repair Loans

28

26.3

26.3

26.3

26.3

504 VLI Repair Grants

29.5

28.7

25

28.7

26

515 Rental Hsg. Direct Lns.

31.3

28.4

28.4

28.4

42.3

514 Farm Labor Hsg. Lns.

20.8

23.9

23.9

23.6

23.9

516 Farm Labor Hsg. Grts.

7.1

8.3

8.3

8.3

8.3

521 Rental Assistanceb

907.1

1,110

1,089

1,089

1,172

523 Self-Help TA

30

25

10

27.5

10

533 Hsg. Prsrv. Grants

3.6

3.5

0

3.5

0

538 Rental Hsg. Guar.

150

150

150

150

200

Rental Prsrv. Demo. (MPR)

17.8

20

20

17

19

542 Rural Hsg. Vouchers

10

12.6

8

7

15

Rural Cmnty. Dev’t Init.

6.1

6

0

4

4

a. Figures shown do not include 5% sequester or 2.5% across the board cut. b. The final FY13 appropriation for RA included a $3 million 514/516 setaside; the final appropriations for FY14 and FY15 have no setasides.

HUD PROPOSED BUDGET FOR 2016 BOOSTS FUNDING. The budget proposes increases above 2015 appropriated levels in almost all HUD programs. CDBG would be cut, but it and many others are proposed at the same levels as in the President’s FY15 budget. The maximum CDBG setaside for Southwest border colonias would increase to 15% from the current 10%. No funds are requested for the Rural Innovation Fund or the Rural Housing and Economic Development program. For the third year in a row, the budget proposes to make SHOP a $10 million setaside within HOME. Also proposed is a new $300 million “Local Housing Policy Grants” program for localities “to support new policies, programs, or regulatory initiatives, such as design options, process changes, and land use regulations.”

HUD Program
(dollars in millions)

FY13
Approp.a

FY14
Approp.

FY15
Admin. Bdgt.

FY15
Approp.

FY16
Admin. Bdgt.

Cmty. Devel. Fund
CDBG

3,308
2,948

3,100
3,030

2,870
2,800

3,066
3,000

2,880
2,800

HOME
SHOP setaside

1,000
b

1,000
b

950
10

900
b

1,060
10

Self-Help Homeownshp. (SHOP)

13.5

10

b

10

b

Tenant-Based Rental Assistance
VASH setaside

18,939.4
75

19,177.2
75

20,100
75

19,304
75

21,123
c

Project-Based Rental Asstnce.

9,339.7

9,516.6

9,346

9,330

10,360

Public Hsg. Capital Fund

1,886

1,875

1,925

1,875

1,970

Public Hsg. Operating Fund

4,262

4,400

4,600

4,440

4,600

Choice Neighbrhd. Initiative

120

90

120

80

250

Native Amer. Hsg. Block Grant

650

650

650

650

660

Homeless Assistance Grantsd

2,033

2,105

2,406.4

2,135

2,480

Hsg. Opps. for Persons w/ AIDS

334

330

332

330

332

202 Hsg. for Elderly

377

385.3

440

436

455

811 Hsg. for Disabled

165

126

160

135

177

Fair Housing

70.8

66

71

65.3

71

Healthy Homes & Lead Haz. Cntl.

120

110

120

110

120

Housing Counseling

45

45

60

47

60

Local Housing Policy Grants

300

a. Figures shown do not include 5% sequester. b. In FY13, FY14, and FY15 SHOP was funded under the Self-Help & Assisted Homeownership Opportunity Program account. Recent Obama budgets have proposed making the program a setaside in HOME. Congress has rejected that proposal. c. VASH vouchers for homeless veterans would be part of a new $177.5 million account of incremental rental vouchers for families, veterans, and tribal families experiencing homelessness and for victims of domestic violence. d. Includes the Rural Housing Stability Program, which is not yet operational.

HUD ISSUES HOUSING TRUST FUND INTERIM RULE. HUD will request public comments on the interim rule after funding is available and states gain experience administering the HTF. Contact Marcia Sigal, HUD, 202-708-2684. HUD has also launched an HTF resource page and an email list. HTF funding is expected to be available from Fannie Mae and Freddie Mac (see HAC News, 12/22/14), although H.R. 574, introduced in Congress, would block those monies.

PROPERTY OWNERS MUST NOTIFY TENANTS BEFORE FINAL PAYMENT ON SECTION 515 OR 514 LOANS. An Unnumbered Letter dated Jan. 16, 2015 provides a form letter for property owners, requiring them to notify tenants 12 months before a USDA loan will be paid off in the regular course of business. (It does not apply when a loan is prepaid.) The form letter lists provisions to be included in the letter to tenants. HAC recommended this action in a letter to USDA last August (see HAC News, 8/20/14). Contact Laura L. Horn, 386-328-5051, ext. 100.

GUIDANCE ISSUED TO HELP RD STAFF SET VOUCHER AMOUNTS. Section 542 vouchers – for tenants in properties with prepaid or foreclosed Section 515 mortgages – are based on rents for modest apartments in the same market area. An Unnumbered Letter dated Jan. 16, 2015 explains how to calculate these comparable market rents. Contact Thomas Ale, USDA, 202-720-1620.

RD ANNOUNCES FY15 FUNDING POLICY FOR SEC. 523 SELF-HELP GRANTS. A message sent to USDA RD’s single-family email list explains that grantees funded in FY14 at 90% of their request can request the remaining 10%. Existing grantees performing satisfactorily may renew at the same amount as their current grants. One new grantee will be selected in each region and new grantees can also replace grantees that have left the program. Contact an RD office.

CFPB HOPES TO FACILITATE SMALL CREDITOR AND RURAL LENDING. Comments are due March 30 on a proposed rule that would expand the definitions of small creditors and rural places in the Consumer Financial Protection Bureau’s mortgage regulations. It would also make some time frames more flexible for small creditors and those serving rural or underserved places. Contact Amanda Quester, CFPB, 202-435-7700.

SUPPORTIVE SERVICES FOR VETERAN FAMILIES GRANTEES CAN APPLY FOR RENEWALS. Nonprofits and consumer cooperatives with existing SSVF programs can apply by March 17 for grants to prevent veteran homelessness. Contact the VA’s SSVF staff, 877-737-0111, SSVF@va.gov.

FHFA PROPOSES MINIMUM FINANCIAL THRESHOLDS FOR NON-BANKS. These new eligibility requirements include net worth, capital, and liquidity criteria for mortgage seller/servicers to do business with Fannie Mae and Freddie Mac. FHFA is accepting comments before finalizing the criteria in the second quarter of 2015, but has no specific deadline.